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SPH's net profit falls 55.4% but operating income rises 15.5% - Jan 13, 2006 (ST)

BackJan 13, 2006

The Straits Times / The Business Times News On SPH

SPH's net profit falls 55.4% but operating income rises 15.5%



By Fiona Chan
Jan 13, 2006
The Straits Times

SINGAPORE Press Holdings (SPH) yesterday reported a 55.4 per cent drop in first-quarter net profit to $98.4 million.

But this was only because net profits in the same period last year were inflated by a one-off $128.5 million investment gain from the sale of a StarHub stake.

In fact, the media group's profit before investment income - which represents the recurring earnings of its media and property businesses - rose 15.5 per cent to $103 million for the first quarter ended Nov 30.

This was largely due to lower operating costs and higher revenues from its newspaper, magazine and property segments.

Operating expenses for the mainboard-listed company fell by 10.2 per cent to $160.5 million as a result of the cessation of SPH's free-to-air TV operations in January last year.

Property revenue, which included rental income from prime Orchard Road mall Paragon, rose 13.3 per cent to $24 million.

SPH's core newspaper and magazine division also saw revenue increase 2.2 per cent to $235.3 million due to a rise in print advertising, which climbed 3.1 per cent to $178.8 million.

This was despite the company's free newspaper Streats being discontinued from last January.

However, total group operating revenue dropped slightly to $261.2 million from $265.4 million a year earlier, due to the termination of TV operations.

Net profit was $98.4 million for the quarter, down from $220.7 million in the same period last year.

This was mainly because last year's figure included a one-off investment income of $128.5 million from the group's sale of a substantial part of its stake in telecoms firm StarHub.

Staff costs fell 2 per cent, or by $1.4 million, as total head count dropped to 3,471 from 3,816 a year ago.

However, newsprint costs rose 7.2 per cent to $29.5 million and are expected to continue rising at a 'measured pace', the company said. Circulation revenue remained flat at $50.9 million.

SPH's chief executive, Mr Alan Chan, said that the group's recurring earnings for the current financial year are expected to be satisfactory. 'The positive sentiment over the economic growth momentum in Singapore will continue to have a favourable impact on the group's advertising revenue in the near term,' he said.

'However, persistent global concerns such as pressure on oil prices and interest rates, and risk of an avian flu pandemic might have a dampening effect on the pace of growth in the Singapore economy in the medium term.'

Looking ahead, the group's investment income, excluding non-recurring gains, is expected to vary with the performance of the local and global financial markets.

Earnings per share for the quarter were six cents, down from 14 cents for the same period last year. Group net asset value per share rose to $1.29 as at Nov 30, up from $1.02 as at Aug 31.

SPH's share price dropped six cents yesterday to close at $4.30. The first-quarter results were released after the market closed.


 

SPH's core newspaper and magazine division saw revenue increase 2.2 per cent to $235.3 million due to a rise in print advertising, which climbed 3.1 per cent to $178.8 million. This was despite Streats being discontinued last January.